Big Money Divorce Triggers Legal Professional Privilege Test Case

Published Tuesday 13th March 2018, 05:00 AM

Professional communications between lawyers and their clients are privileged and strictly private – however, there are rare exceptions to the rule. One such arose in a big money divorce case in which a solicitor was required to submit to questioning under oath.

The case concerned a billionaire who had been ordered to transfer money and assets worth £453 million – 41.5 per cent of his fortune – to his ex-wife. Part of the award was in the form of a £90 million art collection. The husband was found by a judge to have exhibited a cavalier attitude to the English legal system and a naked determination to keep his immense wealth out of the wife’s hands by shifting assets overseas. In particular, he had taken steps to hide the art collection.

In those circumstances, the husband’s former solicitor was summoned to appear before the judge and subjected to cross-examination. He was required to reveal the whereabouts of the art collection and other assets, which he said were being held by corporate entities in Liechtenstein. He was also ordered not to tip the husband or anyone else off about the proceedings before a worldwide freezing order could be issued against the husband’s assets.

In challenging the judge’s orders before the Court of Appeal, lawyers representing the solicitor argued that they were disproportionate and rode roughshod over the principle of legal professional privilege. He was said to have been ambushed into revealing information that had been imparted to him in confidence by a former client.

In dismissing his appeal, however, the Court found that the iniquity of the billionaire’s conduct was sufficient to trigger an exception to the privilege rule. When cross-examined, the solicitor was no longer instructed in the divorce proceedings and was the most obvious potential source of the required information. It was hardly surprising that the husband had not been notified of the application for an asset freezing order and it had been plainly necessary to keep him in the dark.